European Debt-loaded Countries Calling for Mercy

By GG Analyst in Reviews 0 Comment

EUR/USD

The European finance ministers refused the offer of Greek private debt holders. The country wouldn’t agree to the coupon payment of more than 3.5% while the Institute of International Finance set the minimum coupon level at 4%. The EU and the IMF take up the part of Greece, so the latter looks stronger. The essence of the problem is that the suffering European economies are likely to be in a dejected condition for many years to come. Greece’s GDP has been declining for five years in a row and will keep falling further, as debt payment makes the country to tighten more…

EURO: Reversal or Sales Opportunity?

By GG Analyst in Reviews 0 Comment

EUR/USD

Markets cannot remain in sell mode all the time. At one time or another the ticker will swing the other way. Perhaps, we will see one of these moments in the near future. The euro has found the support just above 1.26. This happened despite the S&P’s logical decision to downgrade the rating of the European rescue fund (EFSF) after lowering France’s rating. The good news here is that the lending capacity of the fund hasn’t been affected.  It still can lend up to 440 billion euro to the troubled European nations. That piece of news provided a short-term support to more…

Euro Rallies on Draghi’s Speech

By GG Analyst in Reviews 0 Comment

EUR/USD

Draghi, the head of the European Central Bank, decided not to change the policy. At the ECB’s regular meeting it was decided to keep the main refinancing rate at 1%. Apparently, the reason was that the economy is mainly going in line with the preceding forecasts. We remind that these forecasts promised “a mild recession”. The possible deterrent is the fact that the previous easing in November and December and the inflation rate exceeding its target level of “just below 2%” haven’t taken a full effect yet. It’s remarkable how energetic Draghi was, urging politicians to engage in immediate resolving of more…

Fitch: Italy Poses a Threat to the Eurozone

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday Fitch Ratings voiced its traditional commentary on the situation in Europe. The agency’s spokesman said that the ratings of Spain, Italy, Belgium, Ireland, Slovenia and Cyprus might be lowered and also called Italy the country posing the greatest threat to the integrity of the euro area. The rating of France, as the agency claims, is unlikely to be reviewed this year. Sarkozy must have wiped the sweat off his brow. Italian affairs are by far more complicated. The country has a very large national debt (about 2 trln), which requires constant refinancing. Already in 2012 the country has to generate more…

Markets are Getting Ready to Difficult 2012

By GG Analyst in Reviews 0 Comment

EUR/USD

Yesterday the single currency continued its decline on the increasing bids that the ECB would keep tempering their monetary policy. So, market participants have focused on the amount of the ECB’s reserves. The latter have already made 2.73 trln euros. But the right way to compare the ECB’s reserves with those of other CBs is to consider them in relation to GDP. And at this point they make impressive 29% against approximately 20% of the Federal Reserve and the Bank of England. It’s worth mentioning that the ECB’s balance has doubled over the past six months and is very likely to more…